Trump’s Warning to TSMC: ‘Build in the US or Pay 100% Tax’

In a bold and pointed declaration, US President Donald Trump has turned up the pressure on Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker. Speaking at a Republican National Congressional Committee event in Washington, Trump declared that TSMC must set up its manufacturing operations in the United States or face tariffs as steep as 100%.

TSMC to invest $100 billion in US chip plants over 4 years, driven by rising demand

“I gave them no money,” Trump said, referring to his administration’s stance. “All I did was tell them—if you don’t build your plant here, you’re going to pay a big tax.” His comments took a clear swipe at the Biden administration’s earlier $6.6 billion subsidy aimed at supporting TSMC’s Phoenix, Arizona expansion—a move Trump claims was unnecessary. “Semiconductor companies don’t need the money,” he added.

Growing Tensions Over Tech and Trade

Trump’s ultimatum arrives just as TSMC is under scrutiny in the US over potential export violations. According to recent reports from Reuters, the chipmaker is being investigated by the Department of Commerce for allegedly producing components that were found in Huawei’s advanced AI processor, the Ascend 910B. The processor was linked to Sophgo, a China-based company working with TSMC. The US has previously banned Huawei from acquiring advanced technologies, accusing it of breaching sanctions and stealing trade secrets.

Sources suggest that TSMC could be hit with a fine of $1 billion or more if found to have violated export control laws. The investigation adds another layer of complexity to an already strained US-China tech relationship, with semiconductors sitting at the heart of the power struggle.

TSMC’s US Investment Plans

Despite Trump’s remarks, TSMC has already committed to a massive US expansion. In March 2025, the Taiwanese chip giant announced a $100 billion investment plan to ramp up its chip-making capacity in America over the next four years. The move is aimed at meeting soaring demand from US-based clients.

The announcement sparked concerns in Taiwan over potential long-term impacts on its domestic industry. However, Taiwan’s President Lai Ching-te reassured the public, emphasizing that TSMC’s decision was made independently and in alignment with its growth goals, not due to US political pressure.

A New Chapter in Tech Nationalism?

Trump’s aggressive stance signals a wider shift in US policy—one that pushes for onshore production of critical technologies. With the future of global chip supply chains under the spotlight, and rising geopolitical tensions shaping economic decisions, tech nationalism is gaining new momentum.

As the semiconductor battle heats up, all eyes are now on TSMC—whether it will continue expanding on American terms or face the consequences of a hardline US administration.